Refund limitation under excise law and unjust enrichment failed where duty was paid under protest and burden was not passed on.

Where excise duty was paid under protest under the then-prevailing statutory scheme, the six-month limitation under Section 11B did not apply, so the refund claim was not time-barred. The record also showed that the assessee bore the duty burden and did not recover it from customers through invoices or related assessment documents, satisfying the unjust enrichment test. The refund rejection was therefore unsustainable on both limitation and passing-on of incidence, and refund with applicable interest was held payable.

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Issues: (i) Whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944 despite the duty having been paid under protest; and (ii) whether the assessee had established that the incidence of duty had not been passed on to the buyers.

Issue (i): Whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944 despite the duty having been paid under protest.

Analysis: The duty was paid under protest and the statutory scheme then prevailing excluded the six-month limitation where duty was so paid. The claim was therefore not to be tested by ordinary limitation from the date of the classification order. The record also showed that the protest was evidenced and the payment was made in the course of the dispute.

Conclusion: The refund claim was not barred by limitation and the finding against the assessee on this ground was set aside.

Issue (ii): Whether the assessee had established that the incidence of duty had not been passed on to the buyers.

Analysis: The documentary record showed that the duty was borne by the assessee and was not recovered from customers through the invoices. The absence of duty recovery in the sale invoices, read with the assessment documents, supported the conclusion that the burden was not passed on. The test of unjust enrichment was therefore satisfied.

Conclusion: The assessee proved that the incidence of duty had not been passed on, and the objection based on unjust enrichment failed.

Final Conclusion: The refund rejection was unsustainable on both limitation and unjust enrichment, and the assessee was held entitled to refund with applicable interest.

Ratio Decidendi: Where excise duty is paid under protest during the relevant statutory regime, the refund claim is not barred by limitation, and refund is allowable if the assessee proves that the duty burden was not passed on to buyers.

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